SEC v. Bank of America, N.A., et al. Case No. 13-cv-00447 (W.D.N.C.)

On August 6, 2013, the SEC filed a complaint against Bank of America, N.A. (“BANA”), Banc of America Mortgage Securities, Inc. (“BOAMS”), and Merrill Lynch, Pierce, Fenner & Smith, Inc. f/k/a Banc of America Securities LLC (“BAS”) (collectively, the “Bank of America Entities” or “Defendants”). The Commission alleged, that from at least November 2007 through at least January 2008, the Bank of America Entities made material misrepresentations and omissions in connection with the sale of residential mortgage-backed securities known as BOAMS 2008-A Trust (“BOAMS Trust”). The complaint also alleges that the Bank of America Entities failed to disclose known risks associated with the high concentration of wholesale loans in BOAMS Trust including higher likelihood that the loans would be subject to material underwriting errors, become severely delinquent, fail early in the life of the loan, or prepay. See Complaint.

The Defendants were ordered to pay a total of $225,060,000.00 in disgorgement, prejudgment interest, and penalties, which would be deemed satisfied in full by the payment of Bank of America Corp. to the United States Department of Justice (“DOJ”) in accordance with the terms of the agreement dated August 20, 2014 among Bank of America Corp., the DOJ, and certain States wherein it was agreed that $115,840,000.00 would be allotted to the SEC for settlement of the claims associated with this matter. See DOJ Agreement. In the final judgments, the SEC was ordered to hold all funds, together with interest and income earned thereon (collectively, the “Distribution Fund”), pending further order of the Court. See BANA’s Final Judgment, BOAMS’ Final Judgment, and BAS’s Final Judgment.

The Defendants have paid as ordered, therefore, $115,840,000.00 in the Distribution Fund available for the distribution to harmed investors.

On October 22, 2015, the Court appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Distribution Fund.

On November 18, 2016, the Court appointed Garden City Group LLC as the Distribution Agent to oversee the distribution of the Distribution Fund to injured investors.

On May 30, 2018, the Commission filed a motion to approve a plan of distribution, together with the plan of distribution (the “Plan”).  See Motion and Distribution Plan. 

On July 3, 2018, the Court issued an order that approved the Plan.  See Order. 

The Plan provides for the distribution of the Distribution Fund to investors in the BOAMS Trust harmed by Defendants’ misrepresentations and omissions in the offering materials for the BOAMS Trust. The methodology allocates the Distribution Fund to an eligible claimant based on the proportion of the eligible claimant’s investment in the BOAMS Trust divided by the sum of all eligible claimants’ investments in the BOAMS Trust.

For more information, please contact the Distribution Agent:

Garden City Group LLC, Susan Mancuso
Telephone Number: 800-231-1815
Website: http://www.gardencitygroup.com/
Email: Questions@BOAMortgageObligations.com